PA Senator Yudichak: “Use smart tax policies to take advantage of job growth”
Credit: Office of Senator Yudichak
Pennsylvania lawmakers are using what State Senator John Yudichak (I-Luzerne) calls smart tax policies to attract private companies with massive construction projects requiring jobs in manufacturing and other skilled trades to the Commonwealth.
This recipe for success, the senator said, is driving job growth in his district and others, and will help reduce poverty and crime while improving local economies in all communities.
“These tax credits help the private sector boost job growth and private equity investments – and they help sideline the government,” Yudichak said at the monthly briefing. November 22 hosted by the Pennsylvania Chamber of Business and Industry (PA Chamber) and the Pennsylvania Manufacturers Association (PMA).
Yudichak, chair of the State Senate’s Community, Economic and Recreational Development Committee, joined PMA CEO David Taylor, as well as Gene Barr, the outgoing House of Palestinian Authority, to discuss the positive impacts of newly signed laws that help bring some of North America’s biggest development projects to Pennsylvania.
Two tax incentive laws signed last year and this year by Governor Tom Wolf essentially stem from a 2012 agreement that Pennsylvania structured with Shell Oil Co.
Shell owns and operates the Shell Pennsylvania Petrochemicals Complex, an ethylene cracking plant under construction in Potter Township, Pa., Scheduled to open in 2022. Under the deal, Shell is expected to invest at least $ 1 billion in the state and create at least 2,500 construction jobs in return for a tax incentive of $ 66 million per year over 25 years, also tied to production.
The deal cuts Shell taxes by up to 20% and the combined incentive could reach $ 1.65 billion, becoming one of the largest tax incentives in Pennsylvania history, Yudichak said.
Because the deal “worked so well,” the senator said the state needed a tax credit specific to northeastern Pennsylvania – where its Luzerne County district is located – for it. ” also introduce into the petrochemical market.
“We wanted to replicate that success, especially in the manufacturing sector, which in many casesâ¦ has been left behind,” the senator said at yesterday’s conference. “So we went to work on Act 66.”
Pennsylvania Law 66 of 2020 established the Local Resource Manufacturing Tax Credit, which requires a company to invest $ 400 million in building a new manufacturing plant, creating 800 jobs, paying current wages and to use carbon capture and sequestration technology “when economically possible.” “
In return, each plant (up to four) will receive up to $ 6.6 million in tax relief each year for up to 25 years. And from 2024, qualifying businesses will also be able to purchase dry natural gas at a tax credit of 47 cents per unit. Tax credits for the program are capped at approximately $ 26.6 million per year under the law.
“This new tax credit immediately caught the attention of the private sector,” said Yudichak, “and Bill 66 has been one of the great successes in bringing reasonable and smart tax policies to the table.”
In fact, he said, such policies mean that along the Interstate 80/81 corridor – running from Hazleton to Wilkes-Barre to Scranton – there is now the potential to create about 25,000 new jobs over the course of the next decade.
That wouldn’t happen without smart tax policies like Bill 66, said Yudichak, who has previously lured Houston-based fuel company Nacero Inc. to the region.
Nacero signed an agreement to build a $ 6 billion manufacturing plant on the site of a former coal mine in Newport and Nanticoke township, creating 3,500 construction jobs and 450 permanent jobs in the northeast from Pennsylvania.
“Nacero’s decision to invest $ 6 billion and create nearly 4,000 new jobs represents the biggest economic development investment in the history of Luzerne County,” Yudichak said, noting that the facility is expected to produce 64,000 barrels per day at the Nacero low sulfur plant. carbon gasoline made from renewable and renewable natural gasoline.
The senator added that Nacero’s investment will have a regional impact of $ 25 billion and “give northeastern Pennsylvania a chance to transform its economy.”
âSmart tax policies capitalize on job growth and show business capital is welcome in Pennsylvania,â said Yudichak.
Likewise, the success so far of Act 66 has also recently prompted the General Assembly to adopt earlier this summer a sales and use tax exemption for the development of computer data centers. Governor Wolf signed a state budget bill in July that includes the exemption in what is known as Law 25 of 2021.
The bipartisan law puts Pennsylvania’s tax policy on track to encourage billions of dollars in private investment that will trigger the creation of thousands of new jobs in Commonwealth data centers, Yudichak said, and is signaling to investors that Pennsylvania is prepared to do more to attract technology investment.
He said the law required a broad coalition of state-wide building unions, leaders in the tech industry and a bipartisan group of lawmakers to secure sales tax exemption and since the bill became law, two new data center projects have been announced.
One is a new massive cryptocurrency mining facility and data center developed by Talen Energy and built by Cumulus Data. The development will be on an adjacent campus and powered by the Susquehanna Steam Electric Station nuclear power plant in Salem Township, Luzerne County. The combined $ 400 million project could expand into a $ 1 billion investment, Yudichak said.
The second multi-billion dollar project that recently received zoning approval is for a two million square foot data center in Chester County, Pa., Which will become the largest in the state, Yudichak said.
Bills 66 and 25, the senator said, “really changed the mindset of the legislature by focusing on smart tax policies that free up private equity to create jobs in the private sector.”
Looking ahead, Yudichak said he supports “another smart tax policy bill” sponsored in June by Republican State Senator Ryan Aument, Senate Bill 771, which would also amend the 1971 tax reform code by providing for an annual reduction in net business income. tax from 9.99% currently to 6.99% by 2024. Yudichak signed as a cosponsor of SB 771.
âIt will be an exciting time over the next 10 years as we create jobs in corridor 81 in e-commerce and logistics, and we create manufacturing jobs like Nacero that have the opportunity not only to change the north. is from Pennsylvania, but to really change our gasoline manufacturing in the United States over the next century, âhe said.